Projects Make Headway Despite Tough Market Conditions

By Craig A. Johnson | July 14, 2008

In June, the National Biodiesel Board met for its annual governance meeting in Washington, D.C. While the agenda included discussions of the legislative hurdles the industry needs to clear and appointments to the board, one highlight was the speech given by U.S. Sen. Chuck Grassley, R-Iowa. "Worldwide economic growth, global weather problems, rising marketing costs and the weak U.S. dollar are all having a greater impact on food prices than biofuels," he told meeting attendees.

As the future market becomes increasingly difficult to predict, the senator's words may come as a comfort to the industry's current producers and offer confidence to the next generation of biodiesel producers, especially as the national renewable fuels standard is questioned. "Lifting the biofuels mandate or reducing the incentives won't ease corn or food prices because energy costs are a much greater factor, but using less biofuels will increase our demand for crude oil and raise prices at the pump even higher," Grassley said. "If high energy prices are the cause, how could decreasing the supply of energy be the solution?"

While this debate goes on at Capitol Hill, plants continue to be constructed. In the past month, the biggest concern among builders has been weather in the Midwest, although none of the plants on this list reported work stoppages for that reason.

This month, no plants completed construction, although several companies are on the cusp. At Global Alternative Fuels LLC in El Paso, Texas, company President and Chief Operating Officer Carlos Guzman reported most of the remaining work at the site is confined to "piping and some finishing work." However, one factor delaying start-up is the offtake agreement that Global Alternative Fuels has with Western Refining, an independent oil refiner and marketer in El Paso. In order to receive the product, Western Refining needed to upgrade its load-out terminal, a project that was underway at the end of June.

Other projects, such as Alterra Bioenergy in Plains, Ga., and Tri-State Biodiesel in Brooklyn, N.Y., report slow and steady progress toward their goals. For Alterra, emphasis on finishing the plant has been diminished while the company focuses its energies on the start-up of its 15 MMgy plant in Gordon, Ga. According to Vice President Lisa Ryan, the company wants to realize success at its current plant in Gordon before the company diverts more resources to the project in Plains. For Tri-State Biodiesel in Brooklyn, this is the company's first plant. According to company Chief Executive Officer Brent Baker, the project slowed as the market became unfavorable, but he sees this changing. "We've been in a low gear, but we're coming out of it," he said. The project is still moving ahead but not at the speed Baker would like. Although completion is still slated for 2008, he acknowledged the deadline would be a challenge.